Large companies set to take over children’s homes

Private sector children’s homes will see a series of
takeovers as the market becomes dominated by a number of large
companies, it has been predicted, writes David
Brown.

Owners say they have received an unprecedented level of interest
from prospective buyers in recent months.

Tom Starkey, vice-chair of the National Association of
Independent Resources for Children, said: “Anecdotally we
know of a number of members that have been approached about selling
or are speaking about expanding by taking over other
providers.”

“They [investors] have now started to realise that if a
children’s home is appropriately run and checked then they
are safe to invest in, said Starkey, director of Clifford House,
which has 21 small children’s homes.

“If you have the business plan I can see no reason why you
should not expand by taking over other homes one at a time or why
someone should not enter the market by buying a number of
homes.”

At present, there are about a dozen large providers, with the
largest looking after about 100 young people with 300-400 staff.
But this is small scale compared with the large providers in
private sector health care and care of older people.

Creating of large groups will allow for the provision of
specialist services, such as psychiatric care, that small business
may be unable to provide, said Starkey

Mary Walsh, a founder of SACCS, which specialises in helping
traumatised children, said that she had been approached by a firm
of venture capitalists about a possible sale, which she
rejected

“I fear that people who have become providers because they
want to help children will be squeezed out of the market,”
said Walsh. “I think that we could see some decisions made on
a business basis rather than what is best for the children,” said
Walsh.

Jane Held, co-chairperson of the children and families committee
of the Association of Directors of Social Services, said that it
was working with the government and providers on a strategic
approach to commissioning as part of the government’s Choice
Protects programme.

“We desperately need a mature market in children’s
services,” said Held. “In future there might be fewer
providers, but there would be more choice.”